Turning 65? If you are like most national retirees and workers you could be feeling unsure and unclear of how Medicare and Federal Employee’s Health Benefits Program will work together. This is a subject that consistently gets lots of questions and some discussion during pre-retirement seminars.
Most individuals will agree that registering in Medicare Part A (hospital insurance), is the right thing to do. After all, there is not a premium for anyone who has paid the 1.45 percent Medicare tax. Component A is additionally accessible to the partner of someone who has qualified.
The larger question calls for Medicare Part B (health insurance), particularly whether you need it if you already have Federal Employee’s Health Benefits Program coverage. Here are the basics you need to know.
Medicare Parts A & B are contained in what’s called the Original Medicare Plan with “A” insuring hospitalization and “B” paying for your physician and outpatient care. Component C is the Medicare Advantage Plan, and you’ll be able to select between the First or Medicare Advantage plans when you sign up. Part D covers Prescription Drugs.
The first choice we must make is whether or not to sign up for Medicare at all. Yes, we do have that choice if we are not insured under TriCare (the military retiree’s health care plan). OPM along with the Federal Employee’s Health Benefits Program health care providers recommend that you apply for Medicare benefits three months before you turn 65.
OPM states, “if you’re eligible for Part A without paying the premiums, you should choose it, even if you are still working. This may help cover some of the costs that your Federal Employee’s Health Benefits Program plan may not cover, for example, deductibles, coinsurance, and fees that surpass the strategy’s allowable prices.” OPM PDF Source Here
You must decide on whether to sign up for the Original Medicare Plan (Component A and B) or Medicare Advantage Part C, which gives Preferred PPOs and HMOs coverage. Component D, Medicare’s prescription drug benefit, needs an additional monthly premium and is unnecessary in many instances because Federal Employee’s Health Benefits Program coverage plans contain an all-inclusive prescription drug benefit.
National retirees with Federal Employee’s Health Benefits Program coverage generally choose the First Medicare Plan because it is accessible nationally and you can go to any doctor, specialist, or hospital that accepts Medicare. You may find some of the Medicare Advantage Plans under Component C less expensive than an FEHB plan. There are major dissimilarities between both policies and you’ll need to understand the plan offering including dental, prescription drugs, deductibles, co-payments, and coinsurance.
There is no simple choice between the Medicare system and Federal Employee’s Health Benefits Program
You could examining Medicare and Federal Employee’s Health Benefits Program for several years and still realize it is not an easy decision to make. But if you think about the reasons you have health insurance in the first place, then it makes sense that you simply might want added protection at a time in your life when your health is in greater danger of failing.
It would be much simpler if Federal Employee’s Health Benefits Program coverage would supply supplemental Medicare plans that would require Medicare registrants to participate. There are no Federal Employee’s Health Benefits Program plans that supply this sort of auxiliary strategy at a lower price to FEHBP enrollees. Under the military plan, Tricare for Life, it is required that enrollees show proof of registration in Medicare A and B before getting coverage.
There is one Federal Employee’s Health Benefits Program plan that helps with the Part B premium — the MHBP normal alternative strategy will pay up to $125 of the monthly premium. Once registered, MHBP will no longer ignore your deductibles, copayments and coinsurance, which would make this plan more appealing to people who are still enjoying excellent health and need to prevent the late registration fee for Part B. The only catch is your share of the premium for MHBP non-postal is $209.13 per month for self-only coverage, and $505.65 per month for self and family coverage, making it one of the highest-priced plans in FEHBP. (prices quoted at the writing of this article and can change)
Reasons to Register for Part B
Based on the preceding info, there is a solid argument countering Part B registration. But it is not so easy to make the decision. Here are a few reasons to reconsider enrolling in Part B:
You might be in excellent health now, what about afterward? If you decide to enroll in Part B after you’re retired and over age 65, there is a 10 percent late registration surcharge on the premium for every 12 months that you delayed your registration.
If you lose your first registration at 65, you can just enroll in Medicare during the annual general registration period from January through March (with coverage effective in July). There is a specific registration accessible for people that are covered by health insurance for a partner who is still employed. The specific registration is accessible anytime you have coverage based on present employment. You may sign up for Part B free of penalty so long as you register within eight months of when the present employment health coverage ends.
Many Federal Employee’s Health Benefits Program coverages supply many different incentives to get you to register for both plans. If Medicare is your main insurance, several FEHBP plans will waive their deductibles, copayments and coinsurance for services that are covered by both Medicare and the strategy.
This articles is meant to be a primer to get you started, here are two excellent government resources for retirement that you should continue to read so you can make an informed decision: